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September 20, 2011

Host: Ted Simons

Arizona Restaurant Industry

  |   Video
  • Steve Chucri, President and CEO of the Arizona Restaurant Association, talks about the state of the restaurant industry.
  • Steve Chucri - President, CEO of the Arizona Restaurant Association
Category: Business/Economy   |   Keywords: food, industry, restaurant, update,

View Transcript

Ted Simons: This is Arizona restaurant week, giving us a chance to check on the health of Arizona's restaurant industry. This is Steve Chucri, president and CEO of the Arizona Restaurant Association. Good to have you.

Steve Chucri: Thank you for having me.

Ted Simons: Let's talk about restaurant week. What's the idea behind it, what's the goal?

Steve Chucri: It's the best second week of the year, we have a spring restaurant week, as well. It's a way to celebrate Arizona's restaurants, pure and simple. This is our fourth year having restaurant week. Our first year going statewide. So it's an opportunity for restaurants to showcase the best culinary that Arizona has to offer. We're very fortunate that the patrons of Arizona are digging in.

Ted Simons: How does it work?

Steve Chucri: It's very simple. It’s through the Arizona restaurant association, we are the promoter of the event. Our member and nonmember restaurants alike. You get as a guest of any restaurant that's participating a three-course dinner at a fixed price, at $30 or $40 depending on what the restaurant decides to showcase. You can have a great entree and a great dessert, whatever you want. Restaurant are on sale for a solid week. From fine dining down through casual dining.

Ted Simons: How many restaurants have you got participating in this? And is it difficult to get restaurants to participate in something like this?

Steve Chucri: It's not, it really isn't. The first year was always challenging. Like any other new venture, but this year they just team to really get it. We're really in a position to where restaurants see the value. They see the volume that comes through their doors on a daily basis during this week. We have over 200 participating restaurants. That includes the Phoenix metro area, of course Tucson, as well as Flagstaff this year. And we've gotten off to a great and robust start last Saturday and we will continue through Sunday.

Ted Simons: I was going to say how are things going so far. These are tough economic times, we've talked about this throughout the program on a variety of levels. How are restaurants handling all of this?

Steve Chucri: It's a challenging time, I won't kid you about all that. This week affords you to do, regardless of your budget, it lets you go to celebrate that special engagement that might have taken place months ago but you wanted to wait to take your special someone to a nice restaurant that you might not afford on an everyday basis. For some, the unaffordable becomes affordable. Budgets are tight but this week people let down their hair a bit and opened their wallets and went and celebrated.

Ted Simons: Once the week is over, what are restaurants doing in terms of momentum? Obviously they have to change in terms of marketing or what you do and how you do it. What’s changing out there?

Steve Chucri: In the fourth quarter of 2007 is when this recession started. We saw our industry face a very large and big battle that's only gotten worse over time. What restaurants have done to counter that is go to deep, deep discounting. They are having to market more. In this new recessionary time all the rules changed dramatically. What you see restaurant doing more now than ever is deep, deep discounts, not just restaurant week but they are sending out a variety of discount coupons. They are marketing more on TV. Social media is the new way of advertising for restaurants and tweets and everything else. So it's really caused restaurant owners, they are entrepreneurial by design. They have had to kick it up another notch to keep their doors open.

Ted Simons: You mentioned social media. The internet in general, how has that changed the dynamic for restaurants in terms of marketing, menus, folks maybe staying in and watching TV or doing stuff on the internet, maybe not going out like they used to? What's that dynamic like?

Steve Chucri: The dynamic is interesting. If you follow a certain restaurant and sign up for tweets, they might say hey, special tonight, pasta for $3.99. They have a following. It's growing, they have a following and it's growing. It's all a segment of all generations. We aren't just a restaurant that you go to anywhere. Our industrial has changed to where we were in your dining room. You're picking up a meal from curbside service and taking it to your dining room. We are an extension of the family kitchen table, we really, truly are. That's happened more and more during this slow period of time.

Ted Simons: Are you seeing more in way of affordable dining? Not necessarily the big tables and the Italian restaurant kind of thing. But are we still seeing the fine cuisine? It seems in this economy, folks who drop a certain amount of money may not do it quite as much.

Steve Chucri: It certainly has its fluctuations, no question about that. This year Arizona alone will be a $9.6 billion restaurant industry, that's a lot of money. We grew last year in 2010 by 800 million in growth and sales. What I equate it to is the $100 million powerful, there's a hundred winners, as well. Not anyone got rich. But people are upticking in their frequency of dining and restaurants. Somebody might be brown-bagging it to work on their workday and they may be cutting back on that and getting a meal from a quick-serve restaurant that's going to be equivalent in cost. It take as lot for a restaurant to be successful. It takes those dining rooms, that frequency has to be full. They have to have a good young-of-what their costs are and maintaining those costs.

Ted Simons: With that factor in there, Arizona's reputation as a restaurant down. Compare to other areas and when this recession we got hit very hard in most areas. How has that played into our reputation?

Steve Chucri: Our reputation is improving dramatically in the last few years. I'm a native and I can tell you how much I've seen change in recent years just from the culinary differences. You have more Indian restaurants, and we were known for just having Mexican restaurants. You can see the dynamic from steakhouses to other types of cuisine. It’s not only the restaurant itself that you have to look at. You have to look at what's on the menu. You can go up the street to some downtown restaurants and see tabouli on the menu right next to a hamburger and french fries. I think that excites patrons across the state. It might be slow in coming, but finally Arizona is getting some good ethnic restaurants that are coming to the state that are opening up. Also, other restaurants are adopting those types of cuisine as well.

Ted Simons: And hopefully they will survive during this economic downturn.

Steve Chucri: We will keep our fingers crossed.

Ted Simons: It’s good to have you here. Thanks for joining us.

Steve Chucri: Thank you.

Senator Bundgaard Ethics Investigation

  |   Video
  • Arizona Republic reporter Mary Jo Pitzl provides an update on the State Senate Ethics Committee inquiry into a complaint against Senator Scott Bundgaard.
  • Mary Jo Pitzl - Arizona Republic
Category: Government   |   Keywords: government, bundgaard, ethics, investigation,

View Transcript
Ted Simons: Good evening and welcome to "Horizon," I'm Ted Simons. The Arizona Secretary of State's office is looking into the campaign of a candidate in the recall election of Senate President Russell Pearce. A Democratic official in Pearce's legislative district alleges the candidate, Olivia Cortes, is running a sham campaign aimed at taking Latino votes away from Pearce's main challenger Jerry Lewis. A Senate ethics committee met today to adopt rules of procedure. Democratic Senator David Schapira recommended the committee use the preponderance of evidence as its burden of proof, saying elected officials should be held to a higher standard.

David Shapira: I believe that preponderance of evidence is the standard we should use for these procedures for a couple of reasons. It is certainly higher than that of most criminal procedures. It is equal to that of most civil procedures. At the end of the day, if we use a standard higher than preponderance of evidence, we are doing our constituents a disservice. Choosing this level of burden of proof of preponderance of evidence, where whichever side has more evidence, that side will prevail, allows us to hold our members to a higher standard as our constituents would prefer.

Ted Simons: Instead, the Senate Ethics Committee voted along party lines to make a standard of clear and convincing evidence the burden of proof. Here to tell us more about the ethics hearing is "The Arizona Republic" reporter Mary Jo Pitzl. Good to see you, thanks for joining us.

Mary Jo Pitzl: Thanks for having me.

Ted Simons: We want to figure out how this is going to work. Ethics committee hearing: How does it work?

Mary Jo Pitzl: Well, this is a rarity, they don't happen too often. To a certain extent they are figuring it out as they go along. For example, today the Senate ethics committee met in executive session for about after hour and a half. The clip you ran is about the extent of their public meeting. Then they adjourned and have gone away and we don't know when they are going come back and meet. They haven't decided that yet. The importance of today's meeting -- and this is why I say in a way they are making it up as they go along, they knew they had to update the rules. Committee chairman Ron Gould said he felt their ethics rules were not up to date. They spent a lot of time behind closed doors hashing it out.

Ted Simons: Let's take a step back. The committee considers a complaint and then they vote on the investigation, correct?

Mary Jo Pitzl: Yes. That was a complaint brought by Democratic Senator Steve Gallardo last month. The committee last month sat down and decided on a bipartisan vote that they will proceed with an investigation.

Ted Simons: And the complaint was that senator Bundgaard broke Senate rules by breaking the law, and also engaged in activity that would adversely reflect on the Senate.

Mary Jo Pitzl: Correct, puts the Senate in a bad light.

Ted Simons: That was a 3-1 vote?

Mary Jo Pitzl: It was, yes. Senator Biggs was the lone dissenting vote. Senator Schapira was out of town at a conference so we had the three remaining to vote yes. Yarborough, Gould and Taylor.

Ted Simons: They decide, we're going to go forward and investigate this, we're going hear this. What are they going to do with this?

Mary Jo Pitzl: They are going have a preliminary hearing before they get into the full-blown hearing according to the rules they adopted today. At that point they will talk about some rules for putting out subpoenas and maybe some time frames, and a few more guidelines. So it'll be sort of organization, part 2. We don't know when that meeting will be held. They have to put schedules together.

Ted Simons: They have to figure that out, as well.

Mary Jo Pitzl: Yes.

Ted Simons: Regarding the preponderance of proof, the standard of proof, preponderance of evidence, I should say. Substantive evidence seems to have been used as far as ABSCAM at the Capitol. Clear and convincing is a pretty high standard.

Mary Jo Pitzl: That's up a notch or two in the legal domain. The committee chairman said he felt that was necessary because it was really important stuff. The tenure of a state senator hangs in the balance. The people that sent him there to represent him want to make sure they will have this nailed down. They asked Senator Gould what's clear and convincing; and he said when it's clear and convincing to me that something untoward happened.

Ted Simons: The pseudo courtroom, everyone takes their seats. Who asks the questions? Who decides who asks the questions? What's going on?

Mary Jo Pitzl: The committee chairman is pivotal to this. There will be a prosecutor. The burden of providing a prosecutor falls to Senator Gallardo since he brought the complaint. He has to bring on an attorney to act as a prosecutor at his own expense. He's already got a guy lined up, he says he's going serve pro bono and he may be bringing more attorneys on board to prosecute the case.

Ted Simons: This helps keep frivolous attacks down. If you're going file a complaint, it's your responsibility to find that prosecutor.

Mary Jo Pitzl: Exactly. It keeps the committee from having to act in the role of prosecutor, because they are the judge. They can't be the prosecutor and the jury at the same time.

Ted Simons: Is abscam being used as a template for this?

Mary Jo Pitzl: I think people are looking back at it. It was such a long time ago, and the standard was a tighter standard for members. And that was one that led to the expulsion of a member from the state Senate.

Ted Simons: You bet. As far as subpoena power, the committee has that?

Mary Jo Pitzl: The committee has that. The chairman has to okay the issuance of a subpoena. If he nixes that, people can complain, other members of the committee can lodge a complaint. They have to ponder that and get back within I think five to seven days with their explanation of why and the committee will have to reconsider that. What we don't know, or I don't know, what if we get subpoenaed and don't show up? You subpoena me in court, and if I don't show up, I'm facing some jail time. I don't know what the case is in the Senate. We could make joke that okay, then their punishment is they have to sit in the Senate for a while.

Ted Simons: Okay. The committee then listens to this whole thing, we go through the whole thing. The committee either dismisses the case, or what, decides disciplinary action is warranted? And then what happens?

Mary Jo Pitzl: Then it goes to the full Senate. If they dismiss it, end of story. If there is disciplinary action that flows on to the full Senate, the whole 29 members. Bundgaard can't vote on his own case. That's where time, become as big issue. We are almost to the end of September. They have got three months in the fall before the next session begins. I think there's a sense that they want this over and done with before they give the session in January. This could go on for quite a while.

Ted Simons: And already we've had Senator Bundgaard's lawyer wanting at least three members off of this hearing because of perceived bias?

Mary Jo Pitzl: This follows up on complaints made last week that Senators Gould and Taylor and Schapira are all biased because they have made statements impuning Bundgaard's integrity, basically saying he was a bad boy. That didn't go anywhere. The attorney came back and filed a request with Senate President Pearce to remove these three. Because he didn't file it as a technical formal ethics complaint, Pearce said, I can't act on this. That's not -- it didn't come in in a form that I want. So I'm going to deny the request and I'm confident that these three can carry out their duties. However, he had a very interesting caveat saying he does have concerns that the committee would go ahead and do an ethics investigation on a misdemeanor case that's already been through the courts. He obviously has some heartburn about that being taken to this level.

Ted Simons: He wasn't all that happy about it happening before it went to the courts because then it wasn't ajudicated yet. A lot of folks weren't happy. A lot of folks just really aren't happy about this down there, are they?

Mary Jo Pitzl: No, it's very uncomfortable trying to discipline one of your own. Do you really want to contemplate kicks out one of your own? A lot of people believe before this gets too far down the quasi judicial legislative road that, perhaps Bundgaard will be persuaded to step down from his seat. No indication from the Senate that's in the cards.

Ted Simons: Mary Jo, good to see you, thanks for joining us.

Mary Jo Pitzl: Sure.

Valley Real Estate Market

  |   Video
  • Arizona Republic reporter Catherine Reagor provides an update on the Valley’s real estate market.
  • Catherine Reagor - Arizona Republic
Category: Business/Economy   |   Keywords: housing, market, real estate, update,

View Transcript
Ted Simons: Sales among lower priced homes in the Valley are booming. But other parts of the market are not doing so hot. Here to talk about the mixed bag that is the real estate market in the valley is Catherine Reagor, real estate reporter for the "The Arizona Republic." Good to see you again. Thanks for joining us.

Catherine Reagor: Absolutely.

Ted Simons: Give us a general overview of the real estate market here in the evaluate right now.

Catherine Reagor: August was not a great months. Foreclosures kicked up a little and our median home price dipped down again. We had been doing well, it had been stable, things were looking good. No one's quite sure what happened in August. It wasn't a great month for the government nationally, locally. It was hot, it was a tough time. Now in September we are seeing some better signs. A little pickup in prices. The homes at the low pressure auction on the Maricopa County steps are just selling in seconds.

Ted Simons: And we had a jump in single-family homes foreclosure sales?

Catherine Reagor: Yes, yes, the sale auctions down there now, 1500 homes sold in August at those auctions on the courthouse steps, which is how they do foreclosures. That's a good thing. Then those homes aren't taken back by lenders and they don't sit vacant for six, nine months, and then resell for a cheaper price. And also, the buyers have to pay cash so that's a good side.

Ted Simons: Interesting. This is the first time we've seen an uptick like that all year, isn't it?

Catherine Reagor: That has been a trend that has been growing. The record hit in August. The investors are from all over the world. We know Canadians are buying but there are online services where you can watch it Realtime and do the bids. They are buying in from Australia, Germany, Saudi Arabia, and it's renters. They either want to rent them or they want long-term holds and they are confident in our growth coming back.

Ted Simons: Interesting. A lot of folks are concerned if you have too many investors buying too much property, we're wandering down some familiar territory we have seen in the past.

Catherine Reagor: Like the boom.

Ted Simons: Exactly.

Catherine Reagor: They are unfortunately getting loan they say shouldn't get, and Wall Street did a nice little number on those collateralized loans. This is different financing. When you pay cash, $100,000 for a house, are you going to walk away from it?

Ted Simons: Yeah, probably not. It looks like median price is down even from last year.

Catherine Reagor: It is down a little bit from last year. We were steady all year until August. And the median dropped by a couple thousand dollars. But on the other side, I'm hearing in September we may be coming back up. If we're just bouncing along, that's not too bad. We have to see some things happen. We have to see foreclosures slow and keep slowing as they were. The auctions on the White House steps are helping drive prices down a little bit because of bidding but the houses are less expensive. There's hope that the number of homes for sale is way down. And there are buyers out there. So there's hope our prices could go up by the end of the year.

Ted Simons: It seems from a distance if a house is for sale and it’s under $100,000 you've got 14 people waiting in line to buy it. If it's above the FHA guaranteed loan limit crickets are chirping.

Catherine Reagor: And they are trying to lower those loan limits. Congress is discussing that now. It's tough to get financing now. It's 20% down in a lot of cases. So it's people with cash and in some cases first-time buyers, their parents have the cash and they are buying it outright. So the big concern and the lobbyists in Washington are trying to push to get lenders to open back up and do the loans and not have the 20% down, because that knocks a lot of people out of the market.

Ted Simons: Luxury condos, looks like a rebound there. That's amazing.

Catherine Reagor: Definitely seeing some sell or being rented. The tower in Tempe is full. Monroe downtown, the tallest residential high-rise in Arizona, they were trying to sell, didn't work out. They opened it to renters. I know five people who have already rented there. One lexington, which is old century bank building on Osborn is 90% sold out. The city council members live there. These are not great deals. They got it out of bankruptcy or foreclosure for much cheaper and the people buying condos are buying them for half the price they were advertised in 2006.

Ted Simons: Which is the market correcting itself.

Catherine Reagor: The market is correct and the right buyers. It's not the investors, it's the baby boomers who want an urban life, people who want to work downtown and midtown.

Ted Simons: Before we let you go, you wrote about a reality TV show dealing with foreclosures set in Phoenix?

Catherine Reagor: Yes.

Ted Simons: Good gracious.

Catherine Reagor: Filming to start in the next few weeks. It's supposed to go on the discovery channel. They have picked three specific people to follow and they are great, experts at what they do. They are great characters. They will be very interesting to watch. They don't want themselves for this to be a black eye on Phoenix's market. They don't. They don't want this to be one of those crazy reality shows. But it is very fun to watch those auctions. They are fast and furious.

Ted Simons: The guys are bidding against each other trying to win basically property?

Catherine Reagor: Clients have a phone, their iPad doing this, and they could be on the courthouse steps three auctions at once. Jumping the fence to hear the next one. A client in Saudi Arabia says, I'll go up $3,000 for this. It's more like a commodities floor in Chicago, it's changed. Hopefully the show will portray that and it'll be more a good thing. The trend is going to go away. We will run out of foreclosures.

Ted Simons: That brings up a last question. We keep hearing that banks are ready to dump, to flood the -- are banks ready to just throw a whole bunch of homes onto the market?

Catherine Reagor: They have been doing in that Phoenix since last fall. That’s why we have all those foreclosure auctions. They loosened up here. It's that scary shadow inventory for people who are behind and banks holding. National studies show that Phoenix is in better shape than other cities with high foreclosure rates.

Ted Simons: They let the air out slowly?

Catherine Reagor: Yes. We only have I think 19,000 pending foreclosures out there. Which they are somewhere in the process. That's a third of what we were a couple of years ago. Part are of why we see all these auctions banks are lowering prices and selling them, getting them off their books.

Ted Simons: We'll watch the republic for your column thanks for joining us.

Catherine Reagor: Good to see you.